Updated on 17 November 2016
Singapore: Located in the easternmost part of Southeast Asia, Vietnam is the world's 14th-most-populous country, and the eighth-most-populous Asian country. Until 1986, Vietnam was under a communist government and remained impoverished and politically isolated. In 1986, the government initiated a series of economic and political reforms which began Vietnam's path towards integration into the world economy. By 2000, it had established diplomatic relations with all nations. Since 2000, Vietnam's economic growth rate has been among the highest in the world, and, in 2011, it had the highest Global Growth Generators Index among 11 major economies. Its successful economic reforms resulted in its joining the World Trade Organization in 2007.
Though the country has made great strides and seen economic development in various sectors, Vietnam's healthcare sector faces several challenges. Right, from infectious diseases such as flu to rising rates of chronic illnesses such as diabetes or cancer the nation is grappling with several health issues. Like many developing countries, it also has to contend with increasing resistance to drugs for killer diseases such as tuberculosis and malaria. Many Vietnamese people still suffer from the consequences of the Vietnam war, which took place during the 1960s. The biological weapon, agent orange, not only killed land crops, but also came into contact with the human body through contamination of water. It is not uncommon for Vietnamese women to have miscarriages or children born with disabilities due to this chemical. Reports suggest that the Vietnamese government currently only invests 0.9 percent of its Gross Domestic Product (GDP) on the healthcare system. This only serves, roughly, 30 percent of the population. Vietnam's healthcare sector is still under development. But with an ever-growing aging population, rising economy and increasing international interests, the nation presents investors and foreign healthcare businesses with an exciting growth opportunity to cash-in on this untapped market.
According to the World Health Organization, there are only an average of 7 to 8 healthcare workers and 25 hospital beds for every 10,000 Vietnamese citizens. This is much lower than the global average of 15 healthcare workers and 30 beds per 10,000 people. Nearly 70 percent of Vietnamese stay in rural areas, where it is not easy to get specialized care in hygienic conditions. The quality and availability of health services varies dramatically on whether you are in the city or in rural areas. The majority of hospitals and clinics are located in the larger cities such as Hanoi, Ho Chi Minh City, and Hai Phong. However the good news is that, in comparison to other countries in the same economic position, Vietnam's health care indicators outperform the average, and they continue to improve at an increasing rate. Progress in controlling vaccine-preventable diseases, such as measles, diphtheria and tetanus, has been rapid as well; polio was completely eradicated in 1996. In March, this year, Vietnam called for "drastic measures" to foster the development of private healthcare services in the country to combat patient overload at public hospitals. Given this backdrop and the country's growth prospects,
Pharma Market in Vietnam
Vietnam has approximately 300 local drugmakers that account for more than 85 percent of market volume. However, imported pharmaceuticals have a total market share of 60-70 percent. Majority of Vietnam's local drugmakers are small-scale and in need of R&D investment with limited resources. For long, Vietnamese government has been striving to wean domestic firms off imported raw materials, however pharma imports to Vietnam are expected to grow as demand for healthcare outstrips the rate of progress in homegrown R&D.
Domestic pharmaceutical companies focus mainly on generic drugs, with very low expenditure on R&D. This restricts the scope of domestic companies' operations, forcing them to establish themselves either within Vietnam or through exports. At present, the five leading pharmaceutical companies in Vietnam are Sanofi, Hau Giang Pharmaceuticals (DHG Pharmaceuticals), Imexpharm, Traphaco and Domesco.